Northern Nigerian Breaking News

SCORECARD: Evaluating Nigeria’s digital economy in Tinubu’s first year

By Quadri Adejumo

During his election campaign, President Bola Tinubu unveiled an 80-page policy document titled “Renewed Hope 2023—Action Plan for a Better Nigeria.” This comprehensive plan aimed to set Nigeria on a path to economic revitalization, focusing heavily on the digital economy.

Under the segment titled ‘The Digital Economy: Taking Advantage of The Fourth Industrial Revolution,’ Tinubu, the then All Progressives Congress (APC) candidate identified seven key areas. He pledged that employment and the digital economy would thrive through ICT-enabled outsourcing, innovation and entrepreneurship, tech manufacturing, e-commerce, government digital services, improved broadband penetration, and blockchain development.

The multi-sectoral policy document was met with mixed reactions. Supporters argued that if effectively implemented, the policy could transform Nigeria across all sectors. Critics, however, had one or two doubts about the practicality of such ambitious objectives.

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President Tinubu adopted a rapid-fire approach in an effort to keep his promises. Besides the now famous declaration during his inauguration speech, in which he announced an end to petrol subsidies, the president also signed an Executive Order in June 2023 suspending the 5% excise tax on telecommunication services.

By October 2023, the Ministry of Communications, Innovation, and Digital Economy, headed by Bosun Tijani, launched its strategic blueprint. According to the ministry, this document aimed to “accelerate the diversification of the Nigerian economy by enhancing productivity in critical sectors through technological innovations.” It recognised five core pillars to accelerate the country’s economic growth: knowledge, policy, infrastructure, innovation, entrepreneurship and capital, and trade.

Detailing broadband penetration

The rate of broadband penetration in Nigeria has decreased over the past year, despite the administration’s promises. Broadband penetration fell from 48.28% in May 2023 to 43.53% in March 2024, according to reports. By failing to achieve broadband penetration of 50% by 2023, the 70% target by 2025, as stated by the Nigerian National Broadband Plan became increasingly unlikely.

Experts fault the diminishing naira, declining foreign direct investment, and forex instability for this deficit. In response, a special purpose vehicle (SPV) was approved by the federal government to facilitate the delivery of 90,000 kilometers of fiber-optic cables. However, for this initiative to be successful, collaboration between the federal and state governments is essential.

“This SPV will build the additional fibre-optic coverage required to take Nigeria’s connectivity backbone to a minimum of 125,000km, from the current coverage of about 35,000km,” Minister Tijani says while announcing the approval of the SPV.

He explained that “upon delivery, this will become Africa’s third longest terrestrial fibre-optic backbone, after Egypt and South Africa.”

Dada Abimbola, a communications analyst, told our reporter; “The vision for expanding broadband is commendable. But it’s not something the federal government can achieve alone. Cooperation with state governments is essential.”

“One effective approach is to integrate broadband access routes into new national infrastructure projects. However, we’re facing significant roadblocks at the state level. The issues and costs associated with right-of-way charges are stifling progress.”

Telecommunications and information services

Under President Tinubu, the telecommunications and information services sector has shown some growths, contributing 14.58% to Nigeria’s real GDP in Q1 2024, up from 14% in Q4 2023.

Capital importation into the telecoms sector likewise declined fundamentally last year under President Tinubu, for seven of the year’s twelve months. According to data from the Nigeria Bureau of Statistics (NBS), the sector pulled in $134.75 million in investments in 2023, a sharp drop from the $456.83 million recorded in 2022, representing a decline of more than 70% year-on-year.

Overall, the data on broadband penetration, GDP contribution, and investments in the telecoms sector reveals that the telecommunications and information services industry experienced limited growth throughout over the past year. Likewise, rising inflation, weakening naira, and forex shortage have impacted the productivity of significant telecom operators like MTN and Airtel, restricting the sector’s contribution to the nation’s GDP.

Improving digital economy 

A strong digital economy requires improving digital literacy. As of 2021, more than 50% of Nigerians lacked digital skills, and couldn’t use data services, as indicated by the 2021 World Bank Development Report.

To address this, the Ministry of Communications, Innovation, and Digital Economy launched the 3 Million Tech Talents (3MTT) Programme, aiming to train over three million youths in IT skills by 2030. With 30,000 young Nigerians trained and 270,000 new fellows enrolled, the program shows promise, and the populace believes the ministry may be on track to achieve its mid-term target of improving the country’s digital literacy rate by 70 per cent in 2027.

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Dada strongly believed in the potential of the 3 Million Tech Talents (3MTT) initiative. “This initiative could be a game-changer for Nigeria’s digital literacy,” he asserted. “However, the Ministry of Education needs to step up its efforts to integrate digital literacy into our national educational system.”

“There’s a lack of synergy between the 3MTT project and the Federal Ministry of Education. We need a coordinated approach to scale this initiative across all levels of our educational institutions,” he added.

Nigeria’s startup ecosystem 

While Nigeria’s startup ecosystem has existed for quite some time, it only gained significant prominence not too long. To create a supportive and structured environment for startups to thrive, the federal government introduced the Nigeria Startup Act in 2022.

The Act aimed to create a supportive environment for startups, establishing the National Council for Digital Innovation and Entrepreneurship and a Startup Investment Seed Fund.

The Act also included provisions for tax and financial incentives to support startups’ growth within Nigeria’s ecosystem and emphasized the significance of protecting intellectual property rights.

In spite of these provisions, implementation has been sluggish, and in order to achieve its goals, more awareness is required.

One year into President Tinubu’s administration, the ambitious goals outlined in the “Renewed Hope 2023” policy document face significant challenges. 

Even though there have been accomplishments, the sluggish implementation of key initiatives suggest that Nigeria’s digital economy ambitions still have a long way to go.

 

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